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Proposed Rule

Agricultural Management Assistance Program

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Commodity Credit Corporation, USDA.


Proposed rule with request for comments.


The Commodity Credit Corporation is issuing a proposed rule with request for comments for the Agricultural Management Assistance (AMA) Program. Section 524(b) of the Federal Crop Insurance Act, as amended by Section 133 of the Agricultural Risk Protection Act of 2000, authorized the AMA Program. This proposed rule sets forth the procedures for how producers would apply and participate in the AMA Program.


Comments must be received by September 27, 2002.


Send comments by mail to Conservation Operations Division, Natural Resources Conservation Service, P.O. Box 2890 or by e-mail to; attention: Agricultural Management Assistance.

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Mark W. Berkland, Director, Conservation Operations Division, NRCS, P.O. Box 2890, Washington, DC 20013-2890, telephone: (202) 720-1845; fax: (202) 720-4265; e-mail:, Attention: Agricultural Management Assistance.

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Executive Order 12866

Pursuant to Executive Order 12866 (58 FR 51735, October 4, 1993), the Office of Management and Budget determined that this proposed rule is not a significant regulatory action.

Regulatory Flexibility Act

The Regulatory Flexibility Act is not applicable to this rule because the Commodity Credit Corporation (CCC) is not required by 5 U.S.C. 533 or by any other provision of law to publish a notice of proposed rulemaking with respect to the subject matter of this rule.

Environmental Analysis

A draft Environmental Assessment (EA) has been prepared to assist in determining whether this proposed rule, if implemented, would have a significant impact on the quality of the human environment such that an Environmental Impact Statement should be prepared. Based on the results of the draft EA, NRCS proposes issuing a finding of no significant impact (FONSI) before a final rule is published. Copies of the draft EA and FONSI may be obtained from Walley Turner, Conservation Operations Division, Natural Resources Conservation Service, P.O. Box 2890, Washington, DC 20013-2890 or at​programs/​Env Assess/AMA/AMA.html. Provide comments on the draft EA and FONSI to, Attention: Agricultural Management Assistance, or to the National Environmental Coordinator, Ecological Sciences Division, Natural Resources Conservation Service, P.O. Box 2890, Washington, DC, 20013-2890.

Civil Rights Impact Analysis

CCC has determined through a Civil Rights Impact Analysis that the issuance of this proposed rule will not have a significant effect on minorities. Copies of the Civil Rights Impact Analysis and Finding of No Significant Impact may be obtained from Walley Turner, Conservation Operations Division, Natural Resources Conservation Service, P.O. Box 2890, Washington, DC 20013-2890.

Paperwork Reduction Act

This proposed rule sets forth procedures for implementing AMA. CCC needs certain information from potential applicants in order to carry out the requirements of the program. CCC submitted the information collection requirements in this proposed rule to the Office of Management and Budget (OMB) for approval under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., and CCC prepared an Information Collection Request (ICR) document. The public may obtain a copy of this request from Walley Turner, Conservation Operations Division, Natural Resources Conservation Service, P.O. Box 2890, Washington, DC 20013-2890.

NRCS is committed to compliance with the Government Paperwork Elimination Act (GPEA) and the Freedom to E-File Act, which require Government agencies in general and NRCS in particular to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. The forms and other information collection activities required for participation in the program proposed under this rule are not yet fully implemented for the public to conduct business with NRCS electronically. However, the application form will be available electronically through the USDA eForms Web site at for downloading. Applications may be submitted at the local USDA service centers, by mail or by FAX. At this time, electronic submission is not available because signatures from multiple produces with shares in agricultural operations are required. Still, full implementation of electronic submission is underway.

Executive Order 12988

This proposed rule has been reviewed in accordance with Executive Order 12988. The provisions of this proposed rule are not retroactive. Furthermore, the provisions of this proposed rule preempt State and local laws to the extent such laws are inconsistent with this proposed rule. Before an action may be brought in a Federal court of competent jurisdiction, the administrative appeal rights afforded persons at 7 CFR parts 614, 780 and 11 must be exhausted.

Unfunded Mandates Reform Act of 1995

Pursuant to Title II of the Unfunded Mandates Reform Act of 1995, Public Law 104-4, CCC assessed the effects of this rulemaking action on State, local, and Tribal governments, and the public. This action does not compel the expenditure of $100 million or more by any State, local, or Tribal government, or anyone in the private sector; therefore a statement under section 202 of the Start Printed Page 55172Unfunded Mandates Reform Act of 1995 is not required.

Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994

Because USDA classified this proposed rule as “not major” under section 304 of the Department of Agriculture Reorganization Act of 1994, Pub. L. 104-354, a risk assessment is not required.

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List of Subjects in 7 CFR Part 1465

  • Conservation contract
  • Conservation plan
  • Conservation practices
  • Soil and water conservation
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Accordingly, Title 7 of the Code of Federal Regulations is proposed to be amended by adding a new part 1465 to read as follows:

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Subpart A—General Provisions Sec.
Program requirements.
Conservation practices.
Subpart B—Contracts
Applications for participation and selecting applications for contracting.
Contract requirements.
Conservation practice operation and maintenance.
Cost-share payments.
Contract modification, extension, and transfer of land.
Contract violations and termination.
Subpart C—General Administration
Compliance with regulatory measures.
Access to operating unit.
Performance based upon advice or action of CCC representative.
Offsets and assignments.
Misrepresentation and scheme or device.
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Authority: 7 U.S.C. 1524(b), 16 U.S.C. 3801.

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Subpart A—General Provisions


Through the Agricultural Management Assistance (AMA) program, the Commodity Credit Corporation (CCC) provides financial assistance funds annually to producers in 15 statutorily designated States to construct or improve water management structures or irrigation structures; to plant trees to form windbreaks or to improve water quality; and to mitigate risk through production diversification or resource conservation practices, including soil erosion control, integrated pest management, or transition to organic farming. The AMA Program is applicable in Connecticut, Delaware, Maryland, Massachusetts, Maine, Nevada, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Utah, Vermont, West Virginia, and Wyoming.


(a) Administration and implementation of the conservation provisions of AMA Program for the CCC is assigned to the Natural Resources Conservation Service (NRCS). The Farm Service Agency (FSA) is responsible for “person” determinations under § 1465.23(c) and making cost-share payments.

(b) NRCS shall:

(1) Provide overall management and implementation leadership for the AMA Program;

(2) Establish policies, procedures, priorities, and guidance for implementation;

(3) Establish cost-share payment limits;

(4) Determine eligible practices;

(5) Develop and approve conservation plans and contracts with selected participants;

(6) Provide technical leadership for implementation, quality assurance, and evaluation of performance; and

(7) Make funding decisions and determine allocations of AMA funds.

(c) FSA shall:

(1) Determine ‘person' and producer eligibility; and

(2) Make cost-share payments for practices completed.


The following definitions shall apply to this part and all documents issued in accordance with this part, unless specified otherwise:

Agricultural land means cropland, hayland, pastureland, rangeland, land used for subsistence purposes, and other land, such as forestland, on which crops or livestock are produced.

Applicant means an agricultural producer who has requested in writing to participate in the AMA Program. Producers who are members of a joint operation shall be considered one applicant.

Chief means the Chief of NRCS, or designee.

Conservation district means a political subdivision of a State, Indian tribe, or territory, organized pursuant to the State or territorial soil conservation district law, or tribal law. The subdivision may be a conservation district, soil conservation district, soil and water conservation district, resource conservation district, natural resource district, land conservation committee, or similar legally constituted body.

Conservation practice means a specified treatment, such as a structural or vegetative practice or a land management practice, which is planned and applied according to NRCS standards and specifications.

Contract means a legal document that specifies the rights and obligations of any person who has been accepted for participation in the AMA Program.

Cost-share payment means the financial assistance from CCC to the participant to share the cost of installing eligible practices.

Designated conservationist means an NRCS employee whom the State conservationist has designated as responsible for administration of the AMA Program.

Indian Tribe means any Indian Tribe, band, nation, or other organized group or community that is recognized as eligible for the special assistance and services provided by the United States to Indians because of their status as Indians.

Indian trust lands means real property in which:

(1) The United States holds title as trustee for an Indian or tribal beneficiary, or

(2) An Indian or Tribal beneficiary holds title and the United States maintains a trust relationship.

Lifespan means the minimum time period in which the conservation practices are to be maintained and used for their intended purpose.

Liquidated damages means a sum of money stipulated in the contract that the participant agrees to pay if the participant breaches the contract. The sum represents an estimate of the anticipated or actual harm caused by the breach, and reflects the difficulties of proof of loss and the inconvenience or non-feasibility of otherwise obtaining an adequate remedy.

Operation and maintenance means work that shall be performed by the participant to keep the applied conservation practice functioning for the intended purpose during its life span. Operation includes the administration, management, and performance of non-maintenance actions needed to keep the completed practice safe and functioning as intended. Maintenance includes work to prevent deterioration of the practice, repairing damage, or replacement of the practice to its original condition if one or more components fail.Start Printed Page 55173

Participant means an applicant who is a party to an AMA contract.

Producer means a person who is engaged in agricultural production.

Secretary means the Secretary of the U.S. Department of Agriculture.

State Conservationist means the NRCS employee authorized to direct and supervise NRCS activities in a State, the Caribbean Area, or the Pacific Basin Area.

State Technical Committee means a committee established by the Secretary in a State pursuant to 16 U.S.C. 3861.

Technical assistance means the personnel and support resources needed to conduct conservation practice survey, layout, design, installation, and certification; training and providing quality assurance for professional conservationists; and evaluation and assessment of the AMA Program.

Unit of concern means a parcel of agricultural land that has natural resource conditions that are of concern to the participant.

Program requirements.

(a) Participation in the AMA Program is voluntary. The participant, in cooperation with the local conservation district, applies for practice installation for the farm or ranching unit of concern. The CCC provides cost-share payments through contracts to apply needed conservation practices within a time schedule specified in the contract.

(b) The Chief determines the funds available for financial assistance according to the purpose and projected cost for which the financial assistance is provided in a fiscal year. The Chief allocates the funds available to carry out the AMA Program. Funding obligations shall not exceed the financial assistance provided in a fiscal year.

(c) To be eligible to participate in the AMA Program, an applicant must:

(1) Meet the Food Security Act “person” definition and be an agricultural producer;

(2) Have control of the land for the life of the proposed contract period, except that—

(i) An exception may be made by the Chief in the case of land allotted by the Bureau of Indian Affairs (BIA), Tribal land, or other instances in which the Chief determines that there is sufficient assurance of control; or

(ii) If the applicant is a tenant of the land involved in agricultural production, the applicant shall provide CCC with the written concurrence of the landowner in order to apply an eligible practice;

(3) Submit an application that is acceptable to CCC and is in compliance with the terms and conditions of the AMA Program, and

(4) Supply information as required by CCC to determine eligibility for the AMA Program.

(5) States, political subdivisions, and entities thereof will not be persons eligible for payment.

(6) Any cooperative association of producers that markets commodities for producers shall not be considered to be a person eligible for payment.

(d) Land used as agricultural land that NRCS determines poses a threat to watershed or irrigation management, water quality, or financial risk due to soil erosion, pest infestation, or cultural practices including the existing agricultural management practices of the applicant may be eligible for enrollment in the AMA Program. Land may only be considered for enrollment in the AMA program if NRCS determines that the land is:

(1) Privately owned land;

(2) Publicly owned land where:

(i) The land is under private control for the contract period and is included in the participant's operating unit;

(ii) Conservation practices will contribute to improving the identified natural resource concern; and

(iii) The participant has provided CCC with written authorization from the government landowner to apply the conservation practices; or

(3) Federally recognized Tribal, BIA-allotted, or Indian trust land.

Conservation practices.

(a) The State Conservationist, with advice from the State Technical Committee, shall determine the conservation practices eligible for AMA Program payments. To be considered eligible conservation practices, the practices must improve soil or water management or water quality, or mitigate financial risk through resource conservation.

(b) The State Conservationist, with advice from the State Technical Committee, shall determine the conservation practices eligible for AMA Program payments using a locally led process and guidance in paragraph (a) of this section.

Subpart B—Contracts

Applications for participation and selecting applications for contracting.

(a) Any producer who has eligible land may submit an application for participation in the AMA Program at a USDA service center. Producers who are members of a joint operation shall file a single application for the joint operation.

(b) CCC will accept applications throughout the year. The State Conservationist, with advice from the State Technical Committee, will distribute information on the availability of assistance and the state-specific goals. Information will be provided that explains the process and how to request assistance.

(c) The State Conservationist, with advice from the State Technical Committee, will develop ranking criteria and a ranking process to select applications taking into account local and State priorities.

(d) The State Conservationist, with advice from the State Technical Committee, will rank and select applications for contracting based on the State-developed ranking criteria and ranking process.

(e) The designated conservationist will work with the applicant to collect the information necessary to evaluate the application using the ranking criteria.

(f) FSA shall determine “person” and producer eligibility and make contract payments.

Contract requirements.

(a) In order for a participant to receive cost-share payments, the participant shall enter into a contract agreeing to implement eligible conservation practices.

(b) An AMA contract shall:

(1) Incorporate by reference all portions of a unit applicable to the AMA Program;

(2) Be for a duration of 3 to 10 years;

(3) Incorporate all provisions as required by law or statute, including participant requirements to:

(i) Not conduct any practices on the farm or ranch unit of concern that would tend to defeat the purposes of the contract according to § 1465.25;

(ii) Refund any AMA Program payments received with interest, and forfeit any future payments under the AMA Program, on the violation of a term or condition of the contract, consistent with the provisions of § 1465.25;

(iii) Refund all AMA Program payments received on the transfer of the right and interest of the producer in land subject to the contract unless the transferee of the right and interest agrees to assume all obligations of the contract, consistent with the provisions of § 1465.24; and

(iv) Supply information as required by CCC to determine compliance with the contract and requirements of the AMA Program.

(4) Specify the participant's requirements for operation and maintenance of the applied conservation practices consistent with the provisions of § 1465.22; andStart Printed Page 55174

(5) Incorporate any other provision determined necessary or appropriate by CCC.

(c) The participant must apply the practice(s) within 10 years of signing a contract.

Conservation practice operation and maintenance.

The contract shall incorporate the operation and maintenance of the conservation practice(s) applied under the contract. The participant shall operate and maintain the conservation practice(s) for its intended purpose for the lifespan of the conservation practice, as identified in the contract or conservation plan, as determined by CCC. CCC may periodically inspect the conservation practices during the lifespan of the practices as specified in the contract to ensure that operation and maintenance are occurring.

Cost-share payments.

(a)(1) The Federal share of cost-share payments to a participant shall be 75 percent of the actual cost of an eligible practice. In no instance shall the total financial contributions for an eligible practice from all public- and private-entity sources exceed 100 percent of the actual cost of the practice.

(2) Participants may contribute their portion of the costs of practices through in-kind contributions, including labor and materials, providing the materials contributed meet the NRCS standards and specifications for the practice being installed.

(3) Cost-share payments will not be made to a participant who has applied or initiated the application of a conservation practice prior to approval of the contract.

(b) The total amount of cost-share payments paid to a person under this part may not exceed $50,000 for any fiscal year.

(c) For purposes of applying the payment limitations provided for in this section, CCC shall use the provisions in 7 CFR part 1400 related to the definition of a “person” and the limitation of payments, except that:

(1) The provisions in part 1400, subpart C for determining whether persons are actively engaged in farming, subpart E for limiting payments to certain cash rent tenants, and subpart F as the provisions apply to determining whether foreign persons are eligible for payment, will not apply.

(2) With respect to land under an AMA Program contract which is inherited during the contract period, the $50,000 fiscal year limitation shall not apply to the extent that the payments from any contracts on the inherited land cause an heir who was party to an AMA Program contract on other lands prior to the inheritance to exceed the annual limit.

(3) With regard to contracts on Tribal land, Indian trust land, or BIA allotted land, payments exceeding one limitation may be made to the Tribal venture if an official of the BIA or tribal official certifies in writing that no one person directly or indirectly will receive more than the limitation.

(4) The status of an individual or entity on the date of the application shall be the basis on which the determination of the number of persons involved in the farming operation is made.

(d) The participant and NRCS must certify that a conservation practice is completed in accordance with the contract before CCC will approve the payment of any cost-share payment.

Contract modifications, extensions, and transfers of land.

(a) The participant and CCC may modify a contract if the participant and CCC agree to the contract modification.

(b) Contracts that run less than 10 years may be extended for up to the 10-year limit in order for the participant to complete the practices scheduled in the contract if such extension is requested by the participant before the contract expires.

(c) The parties may agree to transfer a contract with the agreement of all parties to the contract. The transferee must be determined by CCC to be eligible to participate in the AMA Program and shall assume full responsibility under the contract, including operation and maintenance of those conservation practices already installed and to be installed as a condition of the contract.

(d) CCC may require a participant to refund all or a portion of any assistance earned under the AMA Program if the participant sells or loses control of the land under an AMA Program contract and the new owner or controller is not eligible to participate in the AMA Program or refuses to assume responsibility under the contract.

Contract violations and termination.

(a)(1) If CCC determines that a participant is in violation of the terms of a contract or documents incorporated by reference into the contract, CCC shall give the participant a reasonable time, as determined by the State Conservationist, to correct the violation and comply with the terms of the contract and attachments thereto. If a participant continues in violation, the State Conservationist may terminate the AMA Program contract.

(2) Notwithstanding the provisions of paragraph (a)(1) of this section, a contract termination shall be effective immediately upon a determination by the State Conservationist that the participant has submitted false information or filed a false claim, or engaged in any act for which a finding of ineligibility for payments is permitted under the provisions of § 1465.35, or in a case in which the actions of the party involved are deemed to be sufficiently purposeful or negligent to warrant a termination without delay.

(b)(1) If CCC terminates a contract, the participant shall forfeit all rights for future payments under the contract and shall refund all or part of the payments received, plus interest determined in accordance with part 1403 of this chapter. The State Conservationist has the option of requiring only partial refund of the payments received if the State Conservationist determines that a previously installed conservation practice can function independently, is not affected by the violation or other conservation practices that would have been installed under the contract, and the participant agrees to operate and maintain the installed conservation practice for the lifespan of the practice.

(2) If CCC terminates a contract due to breach of contract or the participant voluntarily terminates the contract before any contractual payments have been made, the participant shall forfeit all rights for further payments under the contract and shall pay such liquidated damages as are prescribed in the contract. The State Conservationist will have the option to waive the liquidated damages depending upon the circumstances of the case.

(3) When making all contract termination decisions, CCC may reduce the amount of money owed by the participant by a proportion that reflects the good faith effort of the participant to comply with the contract, or the hardships beyond the participant's control that have prevented compliance with the contract.

(4) The participant may voluntarily terminate a contract if CCC agrees, based on CCC's determination that termination is in the public interest.

(5) In carrying out CCC's role in this section, NRCS may consult with the local conservation district.

Subpart C—General Administration


(a) A participant may obtain administrative review of an adverse decision under the AMA Program in Start Printed Page 55175accordance with parts 11 and 614 of this title, except as provided in paragraph (b) of this section.

(b) The following decisions are not appealable:

(1) Payment rates, payment limits, and cost-share percentages;

(2) Funding allocations;

(3) Eligible conservation practices; and

(4) Other matters of general applicability, including—

(i) Technical standards and formulas;

(ii) Denial of assistance due to lack of funds or authority; or

(iii) Science-based formulas and criteria.

Compliance with regulatory measures.

Participants who carry out conservation practices shall be responsible for obtaining the authorities, rights, easements, or other approvals necessary for the implementation, operation, and maintenance of the conservation practices in keeping with applicable laws and regulations. Participants shall be responsible for compliance with all laws and for all effects or actions resulting from the participant's performance under the contract.

Access to operating unit.

Any authorized CCC representative shall have the right to enter an operating unit or tract to ascertain the accuracy of any representations made in a contract, in anticipation of entering a contract, or as to the performance of the terms and conditions of the contract. Access shall include the right to provide technical assistance and inspect any work undertaken under the contract. The CCC representative shall make a reasonable effort to contact the participant prior to the exercise of this provision.

Performance based upon advice or action of CCC representative.

If a participant relied upon the advice or action of any authorized representative of CCC and did not know or have reason to know that the action or advice was improper or erroneous, the State Conservationist may accept the advice or action as meeting the requirements of the AMA Program and may grant relief, to the extent it is deemed desirable by CCC, to provide a fair and equitable treatment because of the good-faith reliance on the part of the participant.

Offsets and assignments.

(a) Except as provided in paragraph (b) of this section, any payment or portion thereof to any person shall be made without regard to questions of title under State law and without regard to any claim or lien against the crop, or proceeds thereof, in favor of the owner or any other creditor except agencies of the United States Government. The regulations governing offsets and withholdings found in part 1403 of this chapter shall be applicable to contract payments.

(b) Any producer entitled to any payment may assign any payments in accordance with regulations governing assignment of payment found at part 1404 of this chapter.

Misrepresentation and scheme or device.

(a) A producer who is determined to have erroneously represented any fact affecting an AMA Program determination made in accordance with this part shall not be entitled to contract payments and must refund to CCC all payments, plus interest determined in accordance with part 1403 of this chapter.

(b) A producer who is determined to have knowingly:

(1) Adopted any scheme or device that tends to defeat the purpose of the AMA Program;

(2) Made any fraudulent representation; or

(3) Misrepresented any fact affecting an AMA Program determination, shall refund to CCC all payments, plus interest determined in accordance with part 1403 of this chapter, received by such producer with respect to all contracts. The producer's interest in all contracts shall be terminated.

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Signed in Washington, DC, on August 19, 2002.

Bruce I. Knight,

Vice President, Commodity Credit Corporation and Chief, Natural Resources Conservation Service.

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[FR Doc. 02-21835 Filed 8-27-02; 8:45 am]